Woodside Petroleum Ltd has yet to convince its Browse Basin joint venture partners to use a site north of Broome in Western Australia as a liquefied natural gas (LNG) processing hub.
The state government, Woodside and a group representing the traditional owners of the Kimberley region, the Kimberley Land Council (KLC), on Wednesday night agreed to use James Price Point for the hub after lengthy negotiations.
But other joint venture partners in the Woodside-operated Browse Basin project - BHP Billiton, BP, Chevron and Shell - are not parties to the agreement and have not committed to the site.
The joint venturers are mulling whether to proceed with the James Price Point site, which Premier Colin Barnett had threatened to compulsorily acquire if an agreement with the KLC could not be reached.
The alternative is to use Woodside's North West Shelf gas processing facility in Karratha or its nearby Pluto LNG development, which is about 50 percent complete.
"The Browse Joint Venture is considering locations for processing Browse gas at the Kimberley LNG Precinct or at Woodside operated facilities in Karratha and has not yet made a decision on the location," Woodside said in a statement on Thursday.
An environmental impact assessment of the James Price Point site is expected to be complete in 2010.
Meanwhile, Mr Barnett is clinging to hope that Japanese energy giant Inpex will reverse its decision to construct a gas processing facility for its Browse Basin gas in Darwin, rather than in WA.
Inpex announced this more costly option in September last year after losing patience with the government's site selection process for an LNG hub.
Mr Barnett flew to Japan in February in an attempt to woo the company back to WA and on Thursday told reporters he was "in constant communication with Inpex".
Separately, Woodside said on Thursday it was uncertain how long oil production would be suspended at its Vincent oil field in the North West Shelf.
Production was halted following a fire on a vessel that processes oil from the Vincent field on Monday.
Woodside chief executive Don Voelte told reporters an investigation into the fire, which occurred in a gas compression unit, continued.
The investigation team comprises Woodside, the National Offshore Petroleum Safety Authority and shipping company Maersk.
"We do not know what caused it but we know it wasn't human error," Mr Voelte said.
"We know it was mechanical of one type or another, so in that respect, we're looking to make sure it has great integrity before we try to start it back up.
"We do not know how long we'll be off production.
"I'm not getting revenue off the project, so that's a problem for me."
Woodside shares were eight cents lower at A$38.80.
(C) 2009 Asia Pulse Pte Ltd.
